LBHI Litigation Status Update: Court Considers Motions to Dismiss and Transfer Venue

Having now filed both Motions to Dismiss and Motions to Transfer Venue, most of the litigants are now waiting for LBHI to file its Oppositions. The next two Phases of the LBHI litigation will begin upon completion of the hearings on this venue transfer motion and the fully briefed motion to dismiss.

Phase II will begin once the Court rules or postpones the disposition of the Phase I motions to dismiss and transfer. The parties have thirty days after the Court rules or postpones the motions, to submit another scheduling order. In this second Phase, the court will set an answer deadline for the remaining parties who will then proceed to discovery with LBHI.

Thereafter, Phase III will then commence on the date set forth in the Phase II Scheduling Order as will be agreed to by the parties. It is contemplated that Phase III will include dispositive motions and trial.

Although AMLG representing the largest bloc of defendants in these LBHI suits, it has been and continues to be working with the rest of the joint defense counsel to research the best approach to possible handle the denial of the Phase I motions to dismiss and transfer venue if in fact that occurs. The choice depends on whether the Court a) denies the motion, b) submits a report and recommendation to the U.S. District Court or refuses to do so on a denial, and c) what the U.S. District Court does with the recommendation or request for one. The idea is that if the US Bankruptcy Court Judge denies the motion on subject matter jurisdiction, which is a dispositive threshold issue that must be decided prior to protracted litigation, the may the option to seek a review of that non-final decision.

Much to come. Stay tuned.

Should you have any follow-up questions regarding the LBHI cases and/or the Motions related thereto, please feel free to contact Tracy Henderson.